Kenyans abroad continue to fuel the national economy, with diaspora remittances at a historic high of USD 5.08 billion (KSh 656.99 billion) in the 12 months leading to June 2025, according to the Central Bank of Kenya (CBK).
Remittances in June 2025 totalled USD 423 million (KSh 54.68 billion)—a 13.8% increase compared to USD 372 million (KSh 48.06 billion) in June 2024. However, this figure marked a 3.9% month-on-month decline, falling from the record USD 440 million (KSh 56.76 billion) in May.
“The steady growth in remittance inflows remains a key source of foreign exchange earnings and continues to support the balance of payments,” stated the CBK.
The trend of rising inflows was also evident in August 2024, when Kenyans abroad remitted USD 427.2 million (KSh 55.01 billion)—an increase of USD 72.9 million (KSh 9.4 billion) from the same month in 2023. For the year ending August 2024, total inflows rose 12.7% to USD 4.645 billion (KSh 593 billion).
U.S. Policy Tensions Trigger Remittance Anxiety
The June 2025 dip coincided with escalated immigration policies under U.S. President Donald Trump, prompting fears of deportation and policy-induced disruptions. CBK data shows the U.S. remains the largest source of Kenya’s remittances, contributing USD 244.69 million (KSh 31.63 billion), or 57.8% of total inflows for June.
Proposed legislation in the U.S. Senate includes a 1% tax on cash remittances, aimed at raising USD 10 billion (KSh 130 billion) and curbing illegal immigration.
Lora Ries of The Heritage Foundation noted, “Remittance fees could act as a deterrent against undocumented migration by disrupting economic links to home countries.”
Analysts warn that the hostile climate, including reduced refugee resettlement and increased raids, may be undermining the ability of Kenyans abroad to remit funds.
Economic Impact and Strategic Importance
Diaspora remittances have overtaken traditional foreign exchange earners such as tea, horticulture, tourism, and direct investment. They remain a cornerstone for:
- Household consumption
- Education, healthcare, and housing
- SME and real estate investments
- Foreign exchange reserves and shilling stabilisation
According to World Bank data, remittances:
- Reduce poverty
- Improve nutrition and birth outcomes
- Raise school enrollment rates
- Strengthen disaster resilience
Policy Considerations Moving Forward
President William Ruto’s August 2024 initiative to create one million overseas jobs aligns with Kenya’s strategy to boost forex inflows and employment. Yet, external policy pressures—particularly in major sending countries—could complicate implementation.
